John L. Roper Lumber Co. v. Lawson
| Decision Date | 23 June 1928 |
| Docket Number | 17. |
| Citation | 143 S.E. 847 |
| Parties | 195 N.C. 840, 67 A.L.R. 984 v. LAWSON et al. JOHN L. ROPER LUMBER CO. et al. |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Camden County; Midyette, Judge.
Action by the John L. Roper Lumber Company and others against Louis Lawson and another, partners trading as Lawson & Brooke, and the United States Fidelity & Guaranty Company. From a judgment overruling demurrers filed by defendant last named such defendant appeals. Reversed.
Penal bond ordinarily must be strictly construed, with right of sureties to stand on terms of contract.
This is an appeal from a judgment overruling demurrers filed by the defendant, appellant, United States Fidelity & Guaranty Company, the surety upon a bond given by Lawson & Brooke, as principals, for the faithful performance of a contract with the state highway commission for the construction of state highway project No. 112, in Camden county, N. C., known as the George Washington highway. The plaintiffs allege damage to their lands and other property from a fire alleged to have been negligently set out by the contractors, Lawson & Brooke. Each of the several plaintiffs filed separate complaints, and the appellant filed separate demurrers thereto. Only one complaint and one demurrer, each typical of all, are set forth in the transcript on appeal. All demurrers are directed to an alleged failure of the complaints to state facts sufficient to constitute a cause of action against the surety on the bond. All plaintiffs joined in one action in accord with Acts 1925, c. 260, Michie Cumulative Statutes, § 3846 (v), having given the notice required by Acts 1923, c. 100 and having otherwise compiled with the statutes applicable to the matter.
The complaints allege that the defendants Lawson & Brooke entered into a contract with the state highway commission for the construction of a state highway in Camden county, in accordance with certain plans and specifications and certain obligations therein mentioned; that Lawson & Brooke gave a bond with the United States Fidelity & Guaranty Company, as surety, conditioned upon their faithful compliance with the terms of the contract and the conditions thereof, and of all their obligations thereunder, including those set out in the plans and specifications; that, among other things, these provided that the contractors should be held responsible for all damage done to private property growing out of their operations, should use every necessary precaution to prevent injury thereto, should be responsible for all damage to private property resulting from neglect, misconduct, or omission, and that, when any direct or indirect damage should be done, they should restore same or make good such damage or injury in an acceptable manner.
It is alleged by plaintiffs that in August, 1926, while engaged in the prosecution of the work contemplated by the contract, and as a part and in furtherance of their operations, they carelessly set out a fire in brush previously piled by them along the highway, or in growth near the highway, or negligently permitted such fire to be set out by others leaving same unwatched and untended, with the result that it spread to and burned the land, timber, and other property of plaintiffs. The amended complaints also allege that these acts and omissions were in violation of the terms and stipulations of said contract.
The other necessary facts will be set forth in the opinion.
C. M Bain, Savage & Lawrence, W. L. Devany, Jr., and Wolcott, Wolcott & Lankford, all of Norfolk, Va., and McMullan & LeRoy, and Thompson & Wilson, all of Elizabeth City, for appellees.
H. G. Connor, Jr., of Wilson, Walter L. Small, of Elizabeth City, and R. Clarence Dozier, of Norfolk, Va., for appellant.
Defendants Lawson & Brooke, a partnership, on or about May 12, 1926, made a contract with the state highway commission to construct or improve a certain section of the state highway system project No. 112, between South Mills, N. C., and the Virginia state line, in Camden county, 7.67 miles long, in accordance with certain proposals, plans, and specifications, at a cost approximately estimated at $234,230. For the faithful performance of the contract, and to pay materialmen and laborers, for which the contractors were liable, the defendant United States Fidelity & Guaranty Company entered into a bond with the state highway commission in the penal sum of $117,115. In carrying out the contract, it is alleged that Lawson & Brooke were guilty of actionable negligence in burning over a large portion of plaintiff's land, some 854 acres. Lawson & Brooke have completed the work contracted to be done. A statement of plaintiff's claims has been filed in accordance with the statutes. Is the bond liable for the tort? We think not.
The material part of the bond in controversy for the determination of the case, is as follows:
"Now, therefore, the conditions of this obligation are such that, if the above-bonded 'principal' as contractor, shall in all respects comply with the terms of the contract and conditions of said contract, and his, their, and its obligations thereunder, including the specifications and plans therein referred to and made a part thereof, and such alterations as may be made in said specifications and plans as therein provided for, and shall well and truly, and in a manner satisfactory to the state highway engineer, complete the work contracted for, and shall save harmless the state highway commission of North Carolina from any expense incurred through the failure of said contractor to complete the work as specified, and from any damage growing out of the carelessness of said contractor, or his, their, or its servant, and from any liability for payment of wages or salaries due or for material furnished said contractor, and shall well and truly pay all and every person furnishing material or performing labor in and about the construction of said roadway all and every sum or sums of money due him, them, or any of them for all such labor and materials for which the contractor is liable, and also shall save and keep harmless the said state highway commission of North Carolina against and from all losses to it from any cause whatever, including patent, trademark, and copyright infringements in the manner of constructing said project, then this obligation shall be void, or otherwise to be and remain in full force and virtue."
Ordinarily a penal bond must be strictly construed, and sureties have a right to stand on the terms of their contract. Edgerton v. Taylor, 184 N.C. 571, 115 S.E. 156; Insurance Co. v. Durham County, 190 N.C. at page 61, 128 S.E. 469; State v. Carnegie, 193 N.C. 467, 137 S.E. 308; Ingram v. Bank, 195 N.C. 357, 142 S.E. 231.
In recognition of the fact that those furnishing labor and material ordinarily can take no lien on public property, in their behalf, a more liberal construction has prevailed. See United States Code Annotated, tit. 40, p. 95, and cases cited.
In Brick Co. v. Gentry, 191 N.C. at page 639, 132 S.E. 802, it is said:
We are not dealing with C. S. § 2445, relating to bonds required to be given by any contractor with surety to any county, city, town, or other municipal corporation, for the building, repairing, or altering any building, public road, or street. See Supply Co. v. Plumbing Co., 195 N.C. 629, 143 S.E. 248.
We are not discussing the liability of the contractors, Lawson & Brooke, but the liability on the present bond to plaintiffs. The bond is not as clear as it could be written, but, under well-settled law, its provisions should not be extented beyond the reasonable intent gathered from the purpose and language of the bond, and construed in connection with the proposals, plans, and specifications and contract. It has been the policy of long standing in this jurisdiction that liens are given to mechanics, laborers, and materialmen. Even the homestead exemption cannot be claimed against mechanics and laborers' liens. Article 10, § 4, is as follows:
"The provisions of sections one and two of this article shall not be so construed as to prevent a laborer's lien for work done and performed for the person claiming such exemption, or a mechanic's lien for work done on the premises."
Article 14, § 4, is as follows:
"The General Assembly shall provide, by proper legislation, for giving to mechanics and laborers an adequate lien on the subject-matter of their labor."
C. S. c. 49, makes ample provision for "mechanics', laborers' and materialmen's liens." Ordinarily on public works, a lien statute did not apply, bonds were taken. The bond was intended to provide an equivalent or substitute for the legislation for the protection of laborers and materialmen. Mfg. Co. v. Blaylock, 192 N.C. 407, 135 S.E. 136; U.S. Code Anno. supra. Usually, the contractor's bond was given guaranteeing the performance of the work on the part of the contractor, as in McCausland v. Construction Co., 172 N.C. 708, 90 S.E. 1010, and cases cited, and Warner v. Halyburton, 187 N.C. 414, 121 S.E. 756.
In Gastonia v. Engineering Co., 131 N.C. at page 365, 42 S.E. 859, it is said:
"Though no mechanic's lien could be filed against the property, in the hands of the town, it was competent for the parties to contract, and they did contract that the engineering company should pay for 'all materials used and wages of all laborers employed by said...
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